Question

Difference between sale and hire purchase comparison chart

Answer 1

Explanation:

The main points of distinction between the ‘sale’ and ‘hire-purchase’ are as follows:

1. In a sale, property in the goods is transferred to the buyer immediately at the time of contract, whereas in hire-purchase, the property in the goods passes to the hirer upon payment of the last installment.

2. In a sale, the position of the buyer is that of the owner of the goods but in hire purchase, the position of the hirer is that of a bailee till he pays the last installment

3. In the case of a sale, the buyer cannot terminate the contract and is bound to pay the price of the goods. On the other hand, in the case of hire-purchase, the hirer may, if he so likes, terminate the contract by returning the goods to its owner without any liability to pay the remaining installments.

4. In the case of a sale, the seller takes the risk of any loss resulting from the insolvency of the buyer. In the case of hire purchase, the owner takes no such risk, for if the hirer fails to pay an installment, the owner has the right to take back the goods.

5. In the case of a sale, the buyer can pass a good title to a bonafide purchaser from him but in a hire-purchase, the hirer cannot pass any title even to a bonafide purchaser.

6. In a sale, sales tax is levied at the time of the contract whereas in a hire-purchase, sales tax is not leviable until it eventually ripens into a sale (K.L. Johar & Co. vs. Dy. Commercial Tax Officer).

Answer 2

Difference between sale and hire purchase

Explanation:

1. in case of sale ownership of goods transfers immediately to the buyer while in case of hire purchase ownership is transferred to the buyer after the payment of the final installment.
2. in case of sale payment for the good is made in lump sum by the buyer while in case of hire purchase payment is made in installments.
3. in case of sale buyer pays only for the goods purchased while in case of hire purchase the buyer needs to pay price of the commodity as well as interest.

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